Mehrsa Baradaran’s book teaches us that money has a color, an arresting proposition to fans and foes of capitalism alike. As she points out, economic orthodoxy posits that the transactional medium is itself a formal instrument: money expresses but does not affect the value of the substances it measures. Critics of that orthodoxy agree even as they bemoan the results: money denies through its very impersonality the social substrate of exchange. Against that commonsense, Baradaran directs us to consider how the institutions of money creation in the United States – commercial banks – have systemically originated money in white hands over decades. That is, considering money as a process – asking how value is packaged into the everyday units we call dollars and injected into circulation – reveals that we have designed a market that is racially discriminatory in its very medium.

Baradaran challenges us to recognize how much determinations about money’s design matter. That proposition is particularly striking because they are also remarkably malleable: altering the institutions that deliver credit in money can change the way people and groups relate to one another. I want to underscore Baradaran’s argument about the practice of black banking by exploring an alternative vision. Only when the monetary project of the agrarian populists failed did Americans settle on the exclusionary system that Baradaran describes. The contrast suggests that designing money is shaping community; it can bring people together or set them at each other’s throats.

It is common to claim that finance is about ‘credit-intermediation,’ a matter of channeling funds from virtuous savers to needful end-users. The picture behind this assertion is that of a gargantuan broker—the financial system as ‘go-between.’ But modern financial systems are much more about credit-generation than intermediation. We need a new metaphor.

In our view, a modern financial system is best modeled as a public-private franchise arrangement. The franchisor is the sovereign public, acting through its central bank or monetary authority. The franchised good is the monetized full faith and credit of the sovereign—its ‘money.’ And the franchisees are those private sector institutions that are licensed by the public to dispense, in the form of spendable credit, the franchised good.

Like any good franchisor, a public acting through its central bank works to maintain the ‘quality’ of the good that its franchisees distribute. In the contemporary ‘developed’ world, the quality in question has been understood primarily in terms of over-issuance.